FTX Japan Set To Return Funds Belonging To The Clients

Following confirmation that its customers’ assets are not part of the bankruptcy proceedings of its parent company, the Japanese subsidiary of the defunct FTX crypto exchange has released a plan to begin withdrawals.

The company updated its website on December 1 to reflect the fact that its customers’ assets “should not” be included in FTX Japan’s estate due to Japanese legislation requiring crypto exchanges to keep client funds separate from their own assets.

Attorneys for FTX Group in its Chapter 11 bankruptcy case, Landis Rath & Cobb LLP, have confirmed this.

After acquiring the Japanese cryptocurrency exchange Liquid on February 2, FTX Japan did not open until June of this year. The purpose of the adjustment was to accommodate the exchange’s Japanese consumers. 

However,on November 8, FTX Japan followed its parent company’s lead and halted withdrawals due to liquidity concerns. A few days later, on November 10, the Financial Services Agency of Japan said that it had taken disciplinary measures against FTX Japan and ordered it to stop taking new deposits and follow a business improvement order.

Since then, FTX Japan has stated that re-enabling withdrawals is its top priority. The exchange allegedly hopes to do so by the end of 2022. Users would have a method to restart withdrawals once it was recently confirmed that their assets are not deemed part of the exchange’s estate.

The company emphasized that “Japanese customer cash and crypto currency should not be part of FTX Japan’s estate given how these assets are held and property interests under Japanese law.”

According to FTX Japan, company leadership has been communicating with Japanese regulators and has submitted the initial withdrawal plan draft, with the implication that further talks will take place “as key milestones are met.”

FTX CEO Denies Involvement In Fraud

Meanwhile, Sam Bankman-Fried, creator of FTX and former CEO of the cryptocurrency exchange that filed for bankruptcy, has denied any involvement in the company’s fraud, according to a recent post. He further apologized admitting his errors including the fact that he didn’t do a good job of performing his responsibility to regulators, customers, and investors.